How Generative AI can Transform Business Models

Generative AI is going to change the SaaS pricing model - and that’s a good thing. For years, the "per-seat" model has been the go-to for SaaS companies, which tend to grow in tandem with the companies they serve. With the advent of AI-driven efficiency enhancements, however, the landscape of SaaS pricing is undergoing a seismic shift. The conventional wisdom of scaling alongside customer growth no longer holds true in a world where fewer personnel are needed to achieve higher efficiency levels. Consequently, the outdated per-seat model fails to meet the evolving needs of businesses focused on maximizing efficiency. This realization opens doors for founders to innovate their pricing strategies. No longer bound by the constraints of traditional models, entrepreneurs are embracing the freedom to experiment with new approaches that better align with the value they provide to customers. In this evolving landscape, it’s my opinion that value-based pricing will emerge as the North Star. By tethering pricing to tangible outcomes such as cost savings and customer satisfaction metrics (e.g. CSAT score for customer support interactions), businesses can establish a more equitable exchange of value with their clientele. This customer-centric approach fosters stronger partnerships and ensures that pricing reflects the true impact of the service provided. In essence, companies now have the ability to shift their pricing structure to whatever model makes it easiest for their customers to buy in. And with Generative AI, we have the means to make these solutions more creative and impactful than ever before. By prioritizing customer needs and business objectives, founders can differentiate themselves in a crowded market and solidify their position as industry leaders.

Unlocking Business Transformation with a Generative AI Strategy  Generative AI is reshaping industries, making it imperative for leaders and managers to adopt a structured approach. Here's a five-pillar framework for integrating GenAI seamlessly into your organizational fabric: 1️⃣ Business Strategy: Prioritize business objectives aligned with OKRs. Identify GenAI use cases to meet goals and manage innovation portfolios. 2️⃣ Technology Strategy: Decide whether to buy or build GenAI solutions. Invest in infrastructure, security, and MLOps for sustainable innovation. 3️⃣ GenAI Strategy: Map use cases to business objectives and pilot solutions. Establish a Center of Excellence (CoE) for scalable GenAI adoption. 4️⃣ People Strategy: Gain leadership support and manage change effectively. Build skill development paths to create a learning ecosystem. 5️⃣ Governance: Implement accountability mechanisms and enable regular reviews. Ensure compliance with security, ethics, and responsible AI practices. 💡 Why It Matters: A well-executed GenAI strategy empowers organizations to drive innovation, enhance decision-making, and remain competitive in the evolving tech landscape.

Kait Strovink, one of our Creative Directors at Pega, has been using this slide to explain the power of GenAI to transform how the marketing team at Pega is working. Historically, teams that work together in collaborative and especially "co-creative" formats often see the highest levels of aligned goals and partnerships and can deliver the best results. But that level of co-creation often requires larger investments of time - which means it has historically been reserved for only the top priority projects. GenAI changes that. Using GenAI agents our marketing team can do co-creation WHENEVER THEY NEED, simply by involving an AI agent in the conversation. I think the same is true for enterprise transformation. Historically, doing things like Process Re-engineering required massive co-creation investments, and often external guidance and expertise. But now with AI tools (such as Pega GenAI Blueprint), leaders can take a co-creation approach to rethinking their workflows, but with a significantly reduced time investment. That kind of surge in innovation and creativity - and the business transformation that results - is where I think the impact of AI will be most felt at the enterprise.

The SaaS model that defined the 2010s is facing its biggest disruption yet. Generative AI is transforming enterprise software from expensive, rigid subscriptions to dynamic, cost-effective *custom* solutions, harkening back to an era from several decades ago; but without the excessive cost or long implementation durations that mired these custom deployments. What once took years of implementation can now happen in weeks, while AI-driven software evolves continuously with business needs—eliminating the traditional fear of obsolescence. This isn't theoretical. Leading enterprises are already deploying these solutions, currently in pilots, but soon at scale. We are moving from an era of systems of workflow to systems of work. In our recent Harvard Business Review article, Nitin Nohria and I explore how this transformation is redefining competitive advantage. The companies that act now will lead the next decade. The question isn't whether this disruption will happen—it's whether your organization will lead it or be left behind. What's your strategy for the post-SaaS era? https://lnkd.in/dSzSzisq